BT IS to increase annual payments to its pensions fund by £32m after figures showed a £2.1bn funding shortfall.

BT IS to increase annual payments to its pensions fund by &#xA3;32m after figures showed a &#xA3;2.1bn funding shortfall.

The deficit, which has doubled in the space of three years, widens to &#xA3;6.3bn under the FRS17 accounting standard, which provides a snapshot view of the fund rather than smoothing out stock market fluctuations.

BT has made annual top-up payments of &#xA3;200m to the fund since 2000, but will increase that figure after its triennial funding review.

The deficit was announced yesterday at the same time as annual results showing a 44% rise in underlying pre-tax profits to &#xA3;1.83bn in the year to March 31. Group turnover also lifted 2% to &#xA3;18.73bn, while net debt - which once hit &#xA3;30bn - reduced by &#xA3;4bn to &#xA3;9.6bn over the year.

The company added it had been buoyed by strong demand for broadband internet access, with record sales in March taking user numbers to 936,000.

BT's pensions shortfall comes after plunging stock markets earlier this year left a hole in the value of the fund, which has some 350,000 members.

The deficit of &#xA3;6.3bn at March 31 has since reduced to &#xA3;5.7bn, BT said.

Aside from top-up payments, the company pumps an annual &#xA3;303m into its pension scheme.